Arbitration

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We frequently help companies address how to manage dispute resolution with their customers and employees—and in particular, how to make use of arbitration as a fair alternative to litigation in court (including class actions).  As a result, we have a great deal of experience with drafting new arbitration agreements and helping companies fine-tune their existing agreements.  We provide some of our insights in  a recent article published in the Spring 2013 issue of the ABA’s Dispute Resolution Magazine called Getting Under the Hood: A Practical Guide to Drafting Consumer and Employee Arbitration Agreements (pdf).  We hope that readers…
Continue Reading How to Draft Fair and Enforceable Consumer and Employee Arbitration Agreements

The Supreme Court’s decision today in American Express Co. v. Italian Colors Restaurant (pdf), No. 12-133, eliminated the last significant obstacle to adoption of fair, efficient arbitration systems that increase access to justice for consumers while reducing transaction costs for everyone, particularly the huge legal fees of both plaintiffs’ lawyers and defense lawyers.

In AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), the Supreme Court held that the Federal Arbitration Act (FAA) prohibits courts from refusing to enforce arbitration agreements on the ground that they do not provide for class actions. Today’s ruling in American Express makes clear that Concepcion’s determination applies to claims under federal law as well. Mayer Brown represented AT&T Mobility in Concepcion and filed an amicus brief (pdf) for the Chamber of Commerce of the United States of America and Business Roundtable in American Express.

American Express has significant implications both for courts’ consideration of attempts to invalidate arbitration agreements and for the policy debate over the enforceability of those agreements. We discuss both, after explaining the grounds for the Supreme Court’s ruling.Continue Reading Supreme Court Rejects Challenge to Arbitration Agreements

We’ve previously blogged about the Supreme Court’s grant of review and argument in Oxford Health Plans LLC v. Sutter.  Today, the Supreme Court issued its decision (pdf).  In a narrowly-written ruling, the  Court held that courts lack authority under the Federal Arbitration Act (FAA) to vacate an arbitral award authorizing class arbitration when when (1) the arbitrator’s decision is based on an arguable effort to construe the arbitration agreement and (2) the parties had agreed that the arbitrator should decide whether the arbitration agreement allows class-wide arbitration. Under such limited circumstances, the Court held that the FAA’s limited standard …
Continue Reading Supreme Court Issues Narrow Decision Declining to Overturn Arbitrator’s Ruling that Silent Arbitration Clause Permits Class Arbitration

In the wake of AT&T Mobility LLC v. Concepcion, the California Supreme Court granted review in three cases involving significant arbitration issues, including key questions about whether the Federal Arbitration Act preempts California law concerning the enforceability of arbitration agreements.

My colleagues and I have filed amicus briefs on behalf of the Chamber of Commerce of the United States in all three cases, the most recent of which is Iskanian v. CLS Transportation, No. S204032.

In Iskanian, the Second District of the California Court of Appeal had affirmed an order compelling individual arbitration in a putative class/representative action alleging, among other things, that the defendant had failed to pay overtime and provide required meal and rest breaks. For more background on the grant of review and the decision below, please see our prior blog post here.

The Chamber’s amicus brief (pdf) to the California Supreme Court explains why the court of appeal was correct.Continue Reading U.S. Chamber of Commerce Files Amicus Brief On Arbitration Issues In Key California Supreme Court Case

Last Saturday marked the two-year anniversary of the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, a decision that has had an enormous impact on the world of class-action litigation.  To date, Concepcion has been cited in over 650 decisions, and (for the most part) has been applied broadly to enforce agreements to arbitrate on an individual basis.

On Wednesday (May 1), my colleagues Andy Pincus and Evan Tager will join me in presenting a one-hour webinar on arbitration and class actions after Concepcion.  The three of us represented AT&T before the Supreme Court in Concepcion, …
Continue Reading Webinar on Arbitration And Class Actions Two Years After Concepcion

Earlier today, the Ninth Circuit issued its en banc opinion in Kilgore v. KeyBank, N.A. The court had granted en banc review to decide whether the Federal Arbitration Act preempts California’s so-called “Broughton/Cruz” rule, which declares that claims for “public” injunctive relief under California consumer protection statutes are unsuitable for, and exempt from, arbitration.

As we have discussed in prior blog posts—and argued in an amicus brief on behalf of the U.S. Chamber of Commerce—the answer should be easy. The Supreme Court stated in AT&T Mobility LLC v. Concepcion that “[w]hen state law …
Continue Reading Ninth Circuit Narrows California Exception To Arbitration Agreements, But Puts Off Deciding Whether FAA Preempts The Exception Altogether

The Supreme Court heard oral argument earlier today in Oxford Health Plans LLC v. Sutter, No. 12-135, on whether the Federal Arbitration Act (“FAA”) allows an arbitrator to interpret an arbitration agreement that does not affirmatively authorize class arbitration to permit use of that procedure.

For some background on Oxford, please see our prior blog post.  My takeaway from the argument (transcript here) is that two competing principles under the FAA were in play.  On the one hand, class arbitration is highly disfavored:  The Supreme Court has previously explained—both in Stolt-Nielsen S.A. v. AnimalFeeds International Corp.…
Continue Reading Supreme Court Hears Argument In Class Arbitration Case, Oxford Health Plans v. Sutter

Since Concepcion, the plaintiffs’ bar has been exhorting courts to recognize exceptions to its holding that courts may not refuse to enforce an arbitration agreement on the ground that it precludes class actions.  In the employment context, the plaintiffs’ bar thought that it had a winner with Chen-Oster v. Goldman Sachs,  in which a magistrate judge concluded (and a district court agreed) that Title VII bars enforcement of such agreements when the named plaintiff seeks to rely on “pattern-or-practice” evidence of discrimination.  Last week, however, the Second Circuit reversed Chen-Oster and closed the loophole in Parisi v. Goldman, …
Continue Reading Second Circuit Reverses Denial Of Individual Arbitration In Title VII Class Action

Yesterday, my colleagues and I attended oral arguments before the Supreme Court in American Express Co. v. Italian Colors Restaurant, No. 12-133, in which we submitted an amicus brief on behalf of business groups.   As readers of the blog know, the issue in American Express is whether plaintiffs may avoid their agreements to arbitrate on an individual rather than class-wide basis by contending that they cannot “effectively vindicate” their federal claims without the use of the class device.   The Second Circuit held that a plaintiff who can prove that that it would be “economically irrational” to pursue his or her federal antitrust claims without resort to class actions may avoid arbitration.  From the oral arguments, a majority of the Supreme Court appears prepared to reject the Second Circuit’s conclusion.

(Update: An audio recording of the argument is available here.)

American Express had a bit of a head start in light of AT&T Mobility LLC v. Concepcion, in which the Court held two terms ago that the Federal Arbitration Act preempts state-law rules that would condition the enforceability of arbitration agreements on the availability of class procedures.  (We represented AT&T in Concepcion).  In our American Express amicus brief, we explained that Concepcion’s “holding rested on this Court’s conclusion that class arbitration is ‘not arbitration as envisioned by the FAA,’ ‘lacks its benefits,’ and is therefore ‘inconsistent with the FAA.’ There is no basis for believing that the FAA views the fundamental—and therefore protected—characteristics of arbitration differently when a plaintiff’s claim arises under federal law.”

At oral argument, the Justices and parties seemed to take it as given that plaintiffs could not invoke the FAA or the Sherman Act to attack their arbitration agreements solely because they forbid class procedures.  Instead, the argument focused on the meaning and breadth of the language in prior Supreme Court decisions referring to whether a litigant may “effectively vindicate her federal statutory rights in the arbitral forum.”Continue Reading Supreme Court Appears Poised To Reject Second Circuit’s Articulation of “Effective Vindication Of Federal Statutory Rights” Defense For Avoiding Class Arbitration Waivers

The California Supreme Court granted review last week in Franco v. Arakelian Enterprises Inc., No. S207660, in which the California Court of Appeal had refused to enforce an agreement to arbitrate on an individual basis in the context of a wage-and-hour class action. For more on Franco, please see our prior post. The California Supreme Court explained that it will hold its disposition of Franco pending its decision in Iskanian v. CLS Transportation of Los Angeles, another case involving arbitration and wage-and-hour class actions. We have discussed Iskanian in more detail in a prior post.  …
Continue Reading California Supreme Court Grants Review In Employment Arbitration Case